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#1
05-22-2009, 07:46 AM
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Am I a good candidate for debt settlement?
MY combined take home pay between myself and wife is $7700 per month,
House payment 1500.00 per month, will escalate to 2500.00 per month in August of 2010 due to ARM and no way to refi...Currently worth 245,00 but owe 220,00 plus 60,000 on second. Second Mrtg 400 per month, Interest only for now Total Debt Unsecured= 86,000 Total payment on that debt= 2600 per month Car payments=$750 for two vehicles both lease Insurance 350 per month Electric 350-400 per month phone/Cable 100 per month Student loans 250.00 per month Cell phone( i know we can live without, but I have a young driver and we use them for safety) 125.00 Food $1000 per month(we are a family of 6 including my elderly mom) We also take care of my elderly mom and my dad was recently placed in a nursing home for dementia candidate Is settlement right for me? Our DTI is about 75% 
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#2
05-22-2009, 07:55 AM
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Can you provide a list of the creditors you owe and the balances ?
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#4
05-22-2009, 08:02 AM
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It appears you are an excellent candidate for debt settlement.
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#6
05-22-2009, 08:42 AM
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Just because you make a lot of money doesn't mean you are not in a hardship. Keep in mind you have a lot of bills. Bottom line is you have a a high DTI and thus you are overextended.
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#8
05-22-2009, 12:02 PM
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settlement
If you are going through a hardship or can forsee hardship, settlement is a good alternative outside of doing a Bankruptcy to eliminate debt.
When thinking about debt, you should think of debt as being relative. $100,000 to one person can be just as bad as $10,000 to another. If you are going to do settlement, I would do some research before choosing. I would compare and contrast at least 3 companies before making any concrete decisions. You need to know what is acceptable to you and what is not. Set goals for yourself to get out of this debt and let the company what your goals are and not the other way around. Companies I have looked into are Superior and Ram Financial Services. They had friendly people and a good rating with the BBB. I know with Ram they had free e-books that they give to anyone upon request at calltheram The eboos were very helpful and explained Bankruptcy, Debt Settlement, Credit Counseling and Consolidation in great detail. All programs have pros and cons settlement is not an exception. Settlement is probably going to be the program that you have the lowest payment.
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#10
05-22-2009, 01:22 PM
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Settling own your own is a great option as well. It just depends on if you want do all the work yourself or pay a company to do the dirty work for you.
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#11
05-23-2009, 12:10 AM
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Hello,
I will respectfully disagree on this one. You put down a total of approximately $87,500 of debt. For a settlement ratio of 50%, you would need to come up with around $43,750 total to pay them off. That's quite a chunk of change... And that's just how it stands right now. If/when you stop paying on them (Settlement requires you to be 90 to 120 days late), their interest rates will go up, late fees will be assessed, etc., and you could be looking at nearly double the debt amount in a frighteningly short time. Not to mention, the remainder of the debt that is written off in Settlement (for amounts over $600), is reported to the IRS and you will get a 1099C (it is reported as income) which may increase your tax burden, unless you can prove insolvency to the satisfaction of the IRS. HOWEVER, you also have assets and a good income. I can almost promise you that you will be sued (and more than once) should you attempt to settle. Debt collectors will see that on your credit report and salivate. I don't mean to scare you or anything, but I have seen this all too often. I think that you should understand the risks involved before you take such measures. If you decide to go the Debt Settlement route, keep in mind that a company will charge around 15% of your debt, adding much to the needed funds to settle. You can click on "Do It Yourself" above. Debt Settlement works best for low to moderate debt, especially when the candidate has little or no discernible (form a credit report perusal) assets - so I cannot suggest that route. HOWEVER, there is another thing called Debt Management (or Debt Negotiation) which I would highly recommend first. Credit card companies have something called a Hardship Program. They will lower the interest to around 9% so more of your payments can be applied to the principal so you can pay it off faster. In Negotiation you will have to pay the entire amount, and you cannot miss a payment by even a day (it's best to pay a week early just in case of delays at the Post office). You can also tightly budget and squeeze out every available dollar to pay off credit cards completely (either the smallest balance or the highest interest first) by applying the extra funds to the principal. As you get each card paid off and closed, you will have that much more to apply to the next card; and the next. Lather, rinse, repeat. There is also Chapter 13. But I think that a DM program is best for you (and best for your credit!) at this time so that is my recommendation. What you also want to take into consideration is how your credit report will look *after* whatever you decide is completed. Debt Management: Cards paid at payment larger than minimum and before the due date, and voluntarily closed by you. Everything paid in full. GREAT! AWESOME!!  Bankruptcy Ch 13: Debts were paid in monthly installments to a Trustee for 5 years, after which the rest of it is Discharged (i.e. Zero balance). Not so good, but easily recoverable if you take proactive steps within the first 6 months after discharge you will likely have your score up close to 700 within 2 years. :| Debt Settlement: 30 Day lates, 60 day lates, 90 day lates, Charge-offs, "Paid for Less than Full Amount"s, and not to mention Judgments. VERY BAD.  Possible to recover from, but takes more time.Please weigh your choices wisely and I trust that you will make the best decision for you and your family, and your future. __________________
FRAUD: RECOGNIZE IT. REPORT IT. STOP IT. Rip-off companies - FTC. Phone harassment by Debt Collectors - FCC. Banking issues, like ACH problems - OCC.
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#13
05-26-2009, 07:43 AM
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Debt Negotiation Company
Hi, after reading this I'd like to say that I agree with ChrysHenderson: if your debts are not in collections or past due, you're not a good candidate for debt negotiation. It's likely that your credit is in good shape right now, so you don't really have that much leverage.
I'd highly, highly recommend against letting your debts lapse into collections or make late payments. That can potentially ruin your credit if your creditors are unwilling to negotiate later on. If you find yourself in collections or are making late payments, though, try to find a company that doesn't charge a percentage of your debt. Disclosure: My wife and I own a company that doesn't charge a percentage of the debt (Allied Negotiation). Unfortunately, based on your description, you're not a good candidate for our service. Try to negotiate with your credit card companies for lower interest rates. If you've been making payments regularly, sometimes they'll lower your rate which can lower your monthly payments.
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#15
05-26-2009, 01:09 PM
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Chrys, I agree with looking into a debt management plan first but a DMP will not help you if you are overextended. Also most people who are candidates for debt settlement will not have to pay the taxes on the forgiven debt because they are considered insolvent. Basically, "insolvent" means that you have a negative net worth -- that is, you "owe" more than you "own." It is described in IRS Publication 908. This person doesn't have a positive net worth. They owe on their home and cars, they don't own them out right. I very much doubt that a person with a second mortgage on their home has a lot if any equity , especially with the housing market being in the dumps right now.
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